Embodiments disclosed herein relate to payment systems. In particular, some embodiments relate to methods, apparatus, systems, means and computer program products for implementing a payment system on the basis of a payment card system.
Payment card systems are in widespread use. A prominent payment card system is operated by the assignee hereof, MasterCard International Incorporated, and by its member financial institutions. FIG. 1 schematically illustrates a typical transaction, as carried out in a payment system 100. To initiate the transaction, a customer (not shown) visits a retail store (not shown) operated by a merchant, selects goods (not shown) that he/she wishes to purchase, carries the goods to the merchant's point of sale terminal 104, and presents his/her payment card 102 to the point of sale terminal 104. The point of sale terminal 104 reads the customer's payment card account number from the payment card 102, and then sends an authorization request to an acquirer financial institution (FI) 106 with which the merchant has a relationship. The authorization request includes the payment card account number and the amount of the transaction, among other information. The authorization request is routed via a payment card system 108 (which may be, for example, the well-known Banknet system operated by the assignee hereof) to the issuer financial institution 110 that issued the customer's payment card 102. Arrows 112, 114 and 116 trace the path of the authorization request from the POS terminal 104 to the issuer 110.
Assuming that all is in order, the issuer FI 110 transmits a favorable authorization response to the point of sale terminal 104 through the payment card system 108 and via the acquirer FI 106. (The path of the authorization response from the issuer FI 110 to the POS terminal 104 is traced by arrows 118, 120, 122.) The transaction at the point of sale terminal 104 is then completed and the customer leaves the store with the goods. A subsequent clearing transaction initiated by the merchant results in a transfer of the transaction amount from the customer's payment card account 124 to an account that belongs to the merchant. The customer's payment card account 124 may be, for example, either a debit card account or a credit card account. In the former case, the clearing transaction results in the funds being debited directly from the account 124. In the latter case, the clearing transaction results in a charge being posted against the account 124, and the charge subsequently appears on the customer's monthly credit card statement.
The foregoing description of the typical transaction may be considered to be somewhat simplified in some respects. For example, a so-called merchant processing system (not shown) may be interposed between the POS terminal and the acquirer FI. As is familiar to those who are skilled in the art, a merchant processing system may be operated by or on behalf of the merchant to form part of the communications path between the acquirer FI and a considerable number of POS terminals operated by the merchant. It is also often the case that a third party transaction processing service may operate to handle payment card transactions on behalf of the acquirer and on behalf of a large number of other like financial institutions.
The present inventors have now recognized that an existing facility of a payment card system, referred to as a “payment transaction”, may be utilized to provide more convenient and flexible handling of purchases of goods and other exchanges of value. Among other advantages, the transactions described herein may be conducted such that the customer need not disclose his/her payment card account number to the merchant. This may, in at least some circumstances, enhance the security of the customer's payment card account and lessen the possibilities for misappropriation of the payment card account number.
The novel use of payment transactions disclosed herein may also cause transactions to be conducted in such a manner that the customer may be made fully aware of all transaction details before the customer initiates the payment transaction. This may help to protect the customer from unintentionally authorizing erroneous or fraudulent payment card transactions, and may reduce the number of occasions in which transactions need to be reversed.
From the merchant's point of view, transaction techniques disclosed herein may save the merchant from having to enter into a relationship with an acquirer financial institution. This may be particularly advantageous for very small merchants or for merchants who do not have fixed places of business. Moreover, elimination of the “acquirer” function, as proposed herein, may result in savings in bank fees charged to merchants.
The present inventors have also recognized that the novel transaction techniques proposed herein present opportunities for novel value-added services which may be provided to customers, merchants and/or financial institutions.